Handling booking cancellations

 
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Owner advice > Managing rentals > Handling booking cancellations

Handling booking cancellations

When running your holiday home business, it's likely that there will be occasions when your guests may need to cancel their booking. It’s important that your cancellation and refund policies are clearly outlined in your booking contract (not to mention a good reason to have a booking contract!). With this in mind, here’s a selection of tips from other holiday let owners for handling cancellations:

  1. Always provide a booking contract that outlines your cancellation policy should either party need to take such action. This will limit any claims for compensation.

  2. If a guest does have to cancel, offer them an alternative date if possible. Encourage them to check their travel insurance as - depending on their reasons for cancelling - your guests may be covered by their policy. For instance, circumstances such as flooding, heavy snowfall or illness may all be covered in the policy.

  3. Consider whether you would accept a transfer of the holiday to someone else the guest suggests. If so, the new guests will need a new booking contract in their names, which they will need to sign.

  4. To try and fill empty week/s following a cancellation. Check to see if you've received any other enquiries for the same time period and see if those people are still hunting for a holiday. It’s a great opportunity to offer a discount too as you would with last minute offers.

  5. Be prompt in your communications with guests and get confirmation of any monies paid in and out for deposits and refunds.

  6. Most booking contracts have a tiered cancellation policy timeframe for refunds. For example:

  7. Days until arrivalRefund
    56+ days Full booking deposit
    29-56 days 50 per cent of total cost
    15-28 days25 per cent of total cost
    1-14 days10 per cent of total cost
    0Nothing refunded

    This should be based on your own business needs and policies.



If you're using the new Booking Manager tool to take payments from guests and manage your bookings, you'll be choosing from a selection of cancellation policies that are outlined below:

Relaxed

  • Guests cancelling up to one week before the start of the holiday will receive a full refund.

  • Guests cancelling up to one week before the start of the holiday will receive a full refund.

Flexible

  • Guests cancelling up to four weeks before the start of the holiday will receive a refund of 50 per cent of the balance payment.

  • Guests cancelling up to two weeks before the start of the holiday will receive a refund of 25 per cent of the balance payment.

  • In case of a split payment, the booking deposit is always non-refundable.

Moderate

  • Guests cancelling up to four weeks before the start of the holiday will receive a refund of 50 per cent of the balance payment.

  • In case of a split payment, the booking deposit is always non-refundable.

Strict

  • Guests cancelling up to eight weeks before the start of the holiday will receive a refund of 50 per cent of the balance payment.

  • Guests cancelling up to four weeks before the start of the holiday will receive a refund of 25 per cent of the balance payment.

  • In case of a split payment, the booking deposit is always non-refundable.

Superstrict

  • Any money paid by the guest is non-refundable.

For further information, visit the Booking Manager section of your Home Management page and click on FAQs.



Some important points to remember if you need to cancel a booking:

  • Be as helpful as possible. The guest is likely to feel disappointed so be understanding, explain why you have had to cancel the booking and offer alternative weeks.

  • Offer a full refund when you are the one cancelling the booking.

  • As a gesture of goodwill, you might like to offer the property at a later date for a discounted rate.

  • If you are forced to cancel a stay due to weather-related incidents and other 'Acts of God', your guests' insurance should cover them and you are not obliged to offer a refund.

Author: Vicki, Senior manager - agents team

Date: July 2012